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Dwindling Sri Lanka rubber output seen deterring investors

Jul 19, 2018 17:04 PM GMT+0530 | 2 Comment(s)

ECONOMYNEXT – Falling natural rubber production in Sri Lanka might deter new investments in the rubber products manufacturing industry and even prompt existing investors to go where raw material is available, a senior official said.

The government must urgently take measures to increase natural rubber production and improve productivity of existing plantations, said Sunil Poholiyadde, outgoing chairman of the Colombo Rubber Traders’ Association.

The master plan for rubber has many proposals to develop the sector but they need to be implemented quickly, he told association’s annual general meeting.

“Investors coming to the country for value addition come because there has been a fair volume of rubber (available locally),” Poholiyadde said.

“If one has to import raw material and export finished products I doubt many players would be coming.

“And the more serious threat is of players in the game leaving the country,” Poholiyadde said referring to rubber products manufacturers having to import rubber in recent years as local production was not enough. 

Poholiyadde said the government needs to launch a program immediately to revive natural rubber production which had fallen to 83.1 million kilos in 2017 from 130 million kilos in 2013.

“Time is running out. Other countries keep increasing rubber production and yields when we are almost static or falling behind.”

Rubber production had increased only by about four million kilos in 2017 from 2016.

“It’s a very marginal increase – not what’s expected for the sector to boom.”
(COLOMBO, July 19, 2018)
 


 

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2 Comments

  1. sacre blieu July 20, 08:46 AM

    While the top three world rubber producing nations have cut down on production due to oversupply and dropping prices, the irony is that our country has seen a drop in production due to neglect and false promises.
    Even , another disaster is that rubber plantations have been replaced by oil palm, an ecological disaster.

  2. Tilak July 20, 07:17 AM

    The statement Rubber has nothing else to do other than deteriorating is correct within the current context. Look the chronology.
    SL opened unrestricted door for imports the few factories here started at a rapid rate to import latex. At that point of time the USD/LKR was 140 imports were cheap.
    Thus needless to state that the estates were a victim of low prices, higher costs(labor shortage, and on top of this high cost weed control(No chemicals to be used thus expensive labor+ no chemical fertilizer ) ,bad weather(Rain guards not worth current prices).
    Some time later we all know that the rupee has started to speak the bank selling price of 1 USD for imports is over LKR 160/-. The net result of a time period taken for understanding the problem is that the local latex production local collection process developed over decades decades is in shambles.
    Now for a comparison look the situation in India our neighbor by looking their market prices there.(Refer Indian rubber board site for prices).As 19.07.2018 as per the Indian rubber board data RSS1 in Indian markets(Kottam) is USD 1.89/kg whilst world market price(Bangkok) is USD 1.54/KG. Reason I believe that massive Indian rubber industry is absorbing the entire local production a higher prices thus keeping local production that is coming out of air, water, soil, labor within the country is alive.
    What is our situation with no industry willing or is capable of doing this? This can be can be explained by understanding the old saying (Balla innakota polla ne,Polla innakota Balla ne).

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